In the wake of Monday’s bankruptcy filing by General Motors Corp., U.S. Sen. Lamar Alexander has proposed that the nation’s 154 million individual taxpayers be handed shares in the auto manufacturer after it emerges from bankruptcy.
GM’s Chapter 11 filing will make the federal government the company’s largest shareholder with a 60 percent stake. Other owners include a group of the company’s bondholders, the United Auto Workers and the governments of Canada and Ontario.
Detroit-based GM — which yesterday also said it would idle its Spring Hill factory this fall — is expected to emerge from bankruptcy by late this summer. When it does, Alexander told his Senate colleagues, the government should exit its ownership position as soon as possible.
“The best way to help the new GM succeed and recover the taxpayers’ $50 billion in loans may well be simply to give all the government’s stock to the taxpayers and get Washington out of the business of owning and running auto companies — the sooner the better,” Lamar said on the Senate floor late Monday.
In his remarks – which are available here – Tennessee’s senior senator pointed out that GM President and CEO Fritz Henderson told lawmakers Monday morning that unwinding the government’s stake in an orderly way would take longer than the Obama administration has said it wants to take. Giving taxpayers stakes in the company will, he added, create “154 million investor-cheeerleaders.”
“Those shares might not be worth much now, but put them away and one day they might contribute something toward a college education,” Alexander said. “One disadvantage: Giving the stock to taxpayers might well add a few more billion to the federal debt. But whose debt is it anyway? The 154 million taxpayers’. So why not give individual taxpayers the ride up if there is one?”
Click here for more coverage of Monday’s GM events, including the cloudy future of the company’s Spring Hill plant. For a look at some of the many questions arising from the bankruptcy filing, click here.
— Ken Whitehouse contributed to this report